What changed in this filing

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Item 1. Financial Statements

2021-04-08 compared with 2021-01-07 · 127 added, 77 removed, 411 unchanged (33% of the section changed)

1 unchanged sentence

WD-40 COMPANY

CONDENSED CONSOLIDA TED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands, except share and per share amounts)

2 unchanged sentences

Trade accounts receivable, less allowance for doubtful

accounts of $ 490 and $ 362 at November 30, 2020

accounts of $ 550 and $ 362 at February 28, 2021

and August 31, 2020, respectively

21 unchanged sentences

Common stock ― authorized 36,000,000 shares, $ 0.001 par value;

19,836,102 and 19,812,685 shares issued at November 30, 2020 and

19,855,666 and 19,812,685 shares issued at February 28, 2021 and

August 31, 2020, respectively;

and 13,707,767 and 13,664,786 shares

outstanding at November 30, 2020 and August 31, 2020, respectively

outstanding at February 28, 2021 and August 31, 2020, respectively

Additional paid-in capital

2 unchanged sentences

Common stock held in treasury, at cost ― 6,147,899 and 6,147,899

shares at November 30, 2020 and August 31, 2020, respectively

shares at February 28, 2021 and August 31, 2020, respectively

Total shareholders'

1 unchanged sentence

See accompanying notes to condensed consolidated financial statements.

WD-40 COMPANY

CONDENSED CONSOLIDATED STA TEMENTS OF OPERATIONS

WD-40 CO MPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands, except per share amounts)

Three Months Ended November 30,

Three Months Ended February 28/29,

Six Months Ended February 28/29,

Cost of products sold

14 unchanged sentences

See accompanying notes to condensed consolidated financial statements.

WD-40 COMPANY

CONDENSED CONSOLIDATED STATEM ENTS OF COMPREHENSIVE INCOME

WD-40 CO MPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited and in thousands)

Three Months Ended November 30,

Three Months Ended February 28/29,

Six Months Ended February 28/29,

Other comprehensive income (loss):

3 unchanged sentences

WD- 40 COMPANY

CONDENSED CONSOLIDATED STATE MENTS OF SHAREHOLDERS'

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS'

(Unaudited and in thousands, except share and per share amounts)

10 unchanged sentences

Balance at November 30, 2020

Issuance of common stock under share-based

compensation plan, net of shares withheld for taxes

Stock-based compensation

Cash dividends ($ 0.67 per share)

Foreign currency translation adjustment

Balance at February 28, 2021

See accompanying notes to condensed consolidated financial statements.

WD-40 COMPANY

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS'

(Unaudited and in thousands, except share and per share amounts)

Comprehensive

10 unchanged sentences

Balance at November 30, 2019

Issuance of common stock under share-based

compensation plan, net of shares withheld for taxes

Stock-based compensation

Cash dividends ($ 0.67 per share)

Acquisition of treasury stock

Foreign currency translation adjustment

Balance at February 29, 2020

See accompanying notes to condensed consolidated financial statements.

WD-40 COMPANY

CONDENSED CONSOLIDATED ST ATEMENTS OF CASH FLOWS

WD-40 CO MPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)

Three Months Ended November 30,

Six Months Ended February 28/29,

Operating activities:

5 unchanged sentences

Stock-based compensation

Unrealized foreign currency exchange losses

Unrealized foreign currency exchange losses (gains)

Provision for bad debts

64 unchanged sentences

Foreign currency forward contracts in an asset position at the end of the reporting period are included in other current assets, while foreign currency forward contracts in a liability position at the end of the reporting period are included in accrued liabilities in the Company’s consolidated balance sheets .

At November 30, 2020, the Company had a notional amount of $ 13.7 million outstanding in foreign currency forward contracts, which will mature on January 28, 2021 .

Unrealized net gains and losses related to foreign currency forward contracts were no t significant at November 30, 2020 and August 31, 2020 .

Realized net gains and losses related to foreign currency forward contracts were no t significant for both the three months ended November 30, 2020 and 2019.

At February 28, 2021, the Company had a notional amount of $ 8.9 million outstanding in foreign currency forward contracts, which matured on March 30, 2021 .

Unrealized net gains and losses related to foreign currency forward contracts were no t significant at February 28, 2021 and August 31, 2020 .

Realized net gains and losses related to foreign currency forward contracts were no t significant for both the three months ended February 28, 2021 and February 29, 2020.

Realized net gains and losses related to foreign currency forward contracts were no t significant for both the six months ended February 28, 2021 and February 29, 2020.

Both unrealized and realized net gains and losses are recorded in other income (expense), net on the Company’s condensed consolidated statements of operations.

6 unchanged sentences

Under fair value accounting, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

As of November 30, 2020, the Company had no assets or liabilities that are measured at fair value in the financial statements on a recurring basis, with the exception of the foreign currency forward contracts, which are classified as Level 2 within the fair value hierarchy.

As of February 28, 2021, the Company had no assets or liabilities that are measured at fair value in the financial statements on a recurring basis, with the exception of the foreign currency forward contracts, which are classified as Level 2 within the fair value hierarchy.

The carrying values of cash equivalents and short-term borrowings are recorded at cost, which approximates their fair values, primarily due to their short-term nature.

1 unchanged sentence

The Company’s fixed rate long-term borrowings consist of senior notes and are recorded at carrying value.

The Company estimates that the fair value of its senior notes, based on Level 2 inputs, was approximately $ 70.2 million as of November 30, 2020, which was determined based on a discounted cash flow analysis using current market interest rates for instruments with similar terms, compared to their carrying value of $ 69.6 million .

During the three months ended November 30, 2020, the Company did no t record any significant nonrecurring fair value measurements for assets or liabilities in periods subsequent to their initial recognition

The Company estimates that the fair value of its senior notes, based on Level 2 inputs, was approximately $ 67.9 million as of February 28, 2021, which was determined based on a discounted cash flow analysis using current market interest rates for instruments with similar terms, compared to their carrying value of $ 69.6 million .

During the six months ended February 28, 2021, the Company did no t record any significant nonrecurring fair value measurements for assets or liabilities in periods subsequent to their initial recognition.

Recently Issued Accounting Standards

1 unchanged sentence

2019-12, “ Simplifying the Accounting for Income Taxes ” under ASC 740, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application.

This guidance is effective for fiscal years beginning after

December 15, 2021, including interim periods within that fiscal year.

This guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within that fiscal year.

Early adoption is permitted.

19 unchanged sentences

Translation adjustments

Balance as of November 30, 2020

There were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its goodwill subsequent to December 1, 2019, the date of its most recent annual goodwill impairment test, which was conducted during the second quarter of fiscal year 2020.

Based on the results of the annual goodwill impairment test, the estimated fair value of each of the Company’s reporting units exceeded their respective carrying values so significantly that an impairment charge to the Company’s goodwill balances is remote, even in the event that the impacts of the novel

coronavirus (“COVID-19”) pandemic significantly lower results in future periods.

Balance as of February 28, 2021

During the second quarter of fiscal year 2021, the Company performed its annual goodwill impairment test.

The annual goodwill impairment test was performed at the reporting unit level as required by the authoritative guidance as of the Company’s most recent goodwill impairment testing date, December 1, 2020.

During the fiscal year 2021 annual goodwill impairment test, the Company performed a qualitative assessment of each reporting unit to determine whether it was more likely than not that the fair value of a reporting unit was less than its carrying amount.

In performing this qualitative assessment, the Company assessed relevant events and circumstances that may impact the fair value and the carrying amount of each of its reporting units.

Factors that were considered included, but were not limited to, the following:

(1) macroeconomic conditions, including the impacts of the COVID-19 pandemic;

(2) industry and market conditions;

(3) historical financial performance and expected financial performance;

(4) other entity specific events, such as changes in management or key personnel;

and (5) events affecting the Company’s reporting units, such as a change in the composition of net assets or any expected dispositions.

Based on the results of this qualitative assessment, the Company determined that it is more likely than not that the carrying value of each of its reporting units is less than its fair value as of the goodwill impairment testing date and, thus, a quantitative analysis was not required.

As a result, the Company concluded that no impairment of its goodwill existed as of December 1, 2020.

In addition, the Company concluded that there were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its goodwill subsequent to December 1, 2020 through February 28, 2021.

To date, there have been no impairment losses identified and recorded related to the Company’s goodwill.

5 unchanged sentences

Net carrying amount

There has been no impairment charge for the three months ended November 30, 2020 and there were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its existing definite-lived intangible assets.

There has been no impairment charge for the six months ended February 28, 2021 and there were no indicators of impairment identified as a result of the Company’s review of events and circumstances related to its existing definite-lived intangible assets.

The Company’s review of events and circumstances included consideration of the ongoing COVID-19 pandemic.

Changes in the carrying amounts of definite-lived intangible assets by segment for the three months ended November 30, 2020 are summarized below (in thousands):

Changes in the carrying amounts of definite-lived intangible assets by segment for the six months ended February 28, 2021 are summarized below (in thousands):

Balance as of August 31, 2020

1 unchanged sentence

Translation adjustments

Balance as of November 30, 2020

Balance as of February 28, 2021

The estimated amortization expense for the Company’s definite-lived intangible assets in future fiscal years is as follows (in thousands):

16 unchanged sentences

The Company uses the unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate in the currency of the lease.

As of November 30, 2020, finance leases were not significant and all leases recorded on the Company’s consolidated balances sheets were operating leases.

As of February 28, 2021, finance leases were not significant and all leases recorded on the Company’s consolidated balances sheets were operating leases.

Residual value guarantees, restrictions, covenants, sublease income, net gains or losses from sale and leaseback transactions, and transactions with related parties associated with leases are also not significant.

2 unchanged sentences

and (ii) exclude leases with an initial term of 12 months or less (“short-term” leases) from the consolidated balance sheets and will recognize related lease payments in the consolidated statements of operations on a straight-line basis over the lease term.

However, the Company had no significant short-term leases as of November 30, 2020.

The Company obtained additional right-of-use assets of $ 1.0 million in exchange for lease obligations during the three months ended November 30, 2020.

The Company recorded $ 0.5 million in lease expense during both the three months ended November 30, 2020 and 2019.

However, the Company had no significant short-term leases as of February 28, 2021.

The Company obtained additional right-of-use assets of $ 1.1 million in exchange for lease

obligations related to renewals of existing leases during the six months ended February 28, 2021.

The Company did no t obtain significant additional right-of-use assets during the six months ended February 28, 2020.

The Company recorded $ 0.5 million and $ 1.0 million in lease expense during both the three and six months ended February 28, 2021 and February 29, 2020.

This lease expense was included in selling, general and administrative expenses.

An insignificant amount of lease expense was classified within cost of products sold for both the three months ended November 30, 2020 and 2019.

During both the three months ended November 30, 2020 and 2019, the Company paid cash of $ 0.5 million related to lease liabilities.

Variable lease expense under the Company’s lease agreements were no t significant for both the three months ended both November 30, 2020 and 2019.

As of November 30, 2020, the weighted-average remaining lease term was 6.5 years and the weighted-average discount rate was 3.0 % for the Company’s operating leases.

There were no leases that had not yet commenced as of November 30, 2020 that will create additional significant rights and obligations for the Company.

An insignificant amount of lease expense was classified within cost of products sold for both the three and six months ended February 28, 2021 and February 29, 2020.

During the three and six months ended February 28, 2021 and February 29, 2020, the Company paid cash of $ 0.6 million and $ 1.1 million related to lease liabilities, respectively, compared to $ 0.5 million and $ 1.0 million in the corresponding period of the prior fiscal year.

Variable lease expense under the Company’s lease agreements were not significant for both the three and six months ended February 28, 2021 and February 29, 2020.

As of February 28, 2021, the weighted-average remaining lease term was 6.3 years and the weighted-average discount rate was 2.9 % for the Company’s operating leases.

There were no leases that had not yet commenced as of February 28, 2021 that will create additional significant rights and obligations for the Company.

Right-of-use assets and lease liabilities consisted of the following (in thousands):

23 unchanged sentences

Accrued payroll taxes

As of November 30, 2020, the Company held borrowings under two separate agreements as detailed below.

As of February 28, 2021, the Company held borrowings under two separate agreements as detailed below.

Note Purchase and Private Shelf Agreement

20 unchanged sentences

Outstanding draws for which management has both the ability and intent to refinance with successive short-term borrowings for a period of at least twelve months are classified as long-term.

As of November 30, 2020, the entire balance on this facility is classified as long-term and only contains amounts denominated in Euros and Pound Sterling.

As of February 28, 2021, the entire balance on this facility is classified as long-term and only contains amounts denominated in Euros and Pound Sterling.

Euro and Pound Sterling denominated draws will fluctuate in U.S.

8 unchanged sentences

The Credit Agreement includes, among other limitations on indebtedness, a $ 125.0 million limit on other unsecured indebtedness.

Each agreement also includes a most favored lender provision which requires that any time any other lender has the benefit of one or more financial or operational covenants that is different than, or similar to, but more restrictive than those contained in its own agreement, those covenants shall be immediately and automatically incorporated by reference to the other lender’s

Both the Note Agreement and the Credit Agreement require the Company to adhere to the same financial covenants.

5 unchanged sentences

The consolidated interest coverage ratio means, as of any date of determination, the ratio of (a) consolidated EBITDA for the most recently completed four fiscal quarters to (b) consolidated interest charges for the most recently completed four fiscal quarters

As of November 30, 2020, the Company was in compliance with all debt covenants under both the Note Agreement and the Credit Agreement.

As of February 28, 2021, the Company was in compliance with all debt covenants under both the Note Agreement and the Credit Agreement.

Share Repurchase Plan

1 unchanged sentence

The Company made this election in order to preserve cash while it continues to monitor the long-term impacts of the COVID-19 pandemic.

Management does not expect to seek Board approval for a new share buy-back plan until it starts to see a reduced level of uncertainty regarding the pandemic’s impact on the economy and the Company’s business.

Therefore, no repurchase transactions were made during the first quarter of fiscal year 2021.

Management will continue to evaluate future authorizations under its share buy-back program and the Board will consider approval based on management’s recommendations .

Therefore, no repurchase transactions were made during the six months ended February 28, 2021.

Earnings per Common Share

The table below reconciles net income to net income available to common shareholders (in thousands):

Three Months Ended November 30,

Three Months Ended February 28/29,

Six Months Ended February 28/29,

Net income allocated to

2 unchanged sentences

The table below summarizes the weighted-average number of common shares outstanding included in the calculation of basic and diluted EPS (in thousands):

Three Months Ended November 30,

Three Months Ended February 28/29,

Six Months Ended February 28/29,

Weighted-average common

3 unchanged sentences

shares outstanding, diluted

For the three months ended November 30, 2020, there were no anti-dilutive stock-based equity awards outstanding.

For the three months ended November 30, 2019, weighted-average stock-based equity awards outstanding that are non-participating securities in the amount of 5,729 were excluded from the calculation of diluted EPS under the treasury stock method as they were anti-dilutive.

For the three and six months ended February 28, 2021, there were no anti-dilutive stock-based equity awards outstanding.

For the three and six months ended February 29, 2020, weighted-average stock-based equity awards outstanding that are non-participating securities in the amount of 7,604 and 9,479 , respectively, were excluded from the calculation of diluted EPS under the treasury stock method as they were anti-dilutive.

Revenue Recognition

29 unchanged sentences

Costs related to rebates, cooperative advertising and other promotional activities and other discounts are recorded as a reduction to sales upon delivery of the Company ’ s products to its customers.

The Company had a $ 7.9 million and $ 7.5 million balance in rebate/other discount liabilities as of November 30 and August 31, 2020, respectively, which are included in accrued liabilities on the Company ’ s condensed consolidated balance sheets.

The Company recorded approximately $ 5.3 million and $ 5.0 million in rebates/other discounts as a reduction to sales during the three months ended November 30, 2020 and 2019, respectively.

The Company had a $ 7.8 million and $ 7.5 million balance in rebate/other discount liabilities as of February 28, 2021 and August 31, 2020, respectively, which are included in accrued liabilities on the Company ’ s condensed consolidated balance sheets.

The Company recorded approximately $ 5.8 million and $ 11.1 million in rebates/other discounts as a reduction to sales during the three and six months ended February 28, 2021, respectively.

Rebates/other discounts as a reduction to sales during the three and six months ended February 29, 2020 were approximately $ 4.4 million and $ 9.4 million, respectively.

Coupons — Coupon costs are based upon historical redemption rates and are recorded as a reduction to sales as incurred, which is when the coupons are circulated.

Coupon redemption liabilities, which are included in accrued liabilities on the Company ’ s condensed consolidated balance sheets, were not significant at November 30, 2020 and August 31, 2020.

Coupons recorded as a reduction to sales during the three months ended November 30, 2020 and 2019 were also not significant.

Coupon redemption liabilities, which are included in accrued liabilities on the Company ’ s condensed consolidated balance sheets, were not significant at February 28, 2021 and August 31, 2020.

Coupons recorded as a reduction to sales during the three and six months ended February 28, 2021 and February 29, 2020, were also not significant.

Cash discounts — The Company offers certain of its customers a cash discount program to incentivize them to pay the invoice earlier than the normal payment date on the invoice.

Although payment terms vary, most customers typically pay within 30 to 90 days of invoicing.

The Company had a $ 0.4 million and $ 0.5 million balance in the allowance for cash discounts at November 30, 2020 and August 31, 2020, respectively.

The Company recorded approximately $ 1.2 million and $ 1.0 million in cash discounts as a reduction to sales during the three months ended November 30, 2020 and 2019, respectively.

The Company had a $ 0.5 million balance in the allowance for cash discounts at both February 28, 2021 and August 31, 2020.

The Company recorded approximately $ 1.1 million and $ 2.3 million in cash discounts as a reduction to sales during the three and six months ended February 28, 2021, respectively.

Cash discounts as a reduction to sales during the three and six months ended February 29, 2020 were approximately $ 1.0 million and $ 2.0 million, respectively.

Sales returns — The Company recognizes revenue net of allowances for estimated returns, which is based on historical return rates, with a corresponding reduction to cost of products sold.

2 unchanged sentences

The Company ’ s refund liability for sales returns is included in accrued liabilities and represents the amount expected to be owed to the customers for product returns.

The Company’s refund liability for sales returns was not significant at both November 30, 2020 and August 31, 2019.

The Company’s refund liability for sales returns was not significant at both February 28, 2021 and August 31, 2020.

The Company also records an asset for the value of inventory that represents the right to recover products from customers associated with sales returns.

The value of this inventory is recorded to other current assets and the balance in this account associated with product returns was not significant at November 30, 2020 and August 31, 2020.

The value of this inventory is recorded to other current assets and the balance in this account associated with product returns was not significant at February 28, 2021 and August 31, 2020.

Disaggregation of Revenue

6 unchanged sentences

Revenue is subsequently recognized when revenue recognition criteria are met, generally when control of the product transfers to the customer.

The Company had contract liabilities of $ 2.3 million and $ 1.4 million as of November 30, 2020 and August 31, 2020, respectively.

The Company had contract liabilities of $ 2.3 million and $ 1.4 million as of February 28, 2021 and August 31, 2020, respectively.

These contract liabilities are recorded in accrued liabilities on the Company ’ s condensed consolidated balance sheets.

The Company did no t have any contract assets as of November 30, 2020 and August 31, 2020.

The Company did no t have any contract assets as of February 28, 2021 and August 31, 2020.

Commitments and Contingencies

6 unchanged sentences

Upon the termination of contracts with contract manufacturers, the Company obtains certain inventory control rights and is obligated to work with the contract manufacturer to sell through all product held by or manufactured by the contract manufacturer on behalf of the Company during the termination notification period.

If any inventory remains at the contract manufacturer at the termination date, the Company is obligated to purchase such inventory which may include raw materials, components and finished goods.

If any inventory remains at the contract manufacturer at the termination date, the Company is obligated to purchase such inventory which may include raw materials,

components and finished goods.

The amounts for inventory purchased under termination commitments have been immaterial .

In addition to the commitments to purchase products from contract manufacturers described above, the Company may also enter into commitments with other manufacturers to purchase finished goods and components to support innovation and renovation initiatives and/or supply chain initiatives.

As of November 30, 2020, no such commitments were outstanding.

As of February 28, 2021, no such commitments were outstanding.

From time to time, the Company is subject to various claims, law suits, investigations and proceedings arising in the ordinary course of business , including but not limited to, product liability litigation and other claims and proceedings with respect to intellectual property, breach of contract, labor and employment, tax and other matters .

As of November 30, 2020, there were no unasserted claims or pending proceedings for claims against the Company that the Company believes will result in a probable loss for the Company and, as to claims that the Company believes may result in a reasonably possible loss, the Company believes that no reasonably possible outcome of any such claim will have a materially adverse impact on the Company’s financial condition , results of operations or cash flows.

As of February 28, 2021, there were no unasserted claims or pending proceedings for claims against the Company that the Company believes will result in a probable loss for the Company and, as to claims that the Company believes may result in a reasonably possible loss, the Company believes that no reasonably possible outcome of any such claim will have a materially adverse impact on the Company’s financial condition , results of operations or cash flows.

For further information on the risks the Company faces from existing and future claims, suits, investigations and proceedings, see the Company’s risk factors disclosed in Part I―Item 1A, “Risk Factors,” in its Annual Report on Form 10-K for the fiscal year ended August 31, 2020, which was filed with the SEC on October 21, 2020.

4 unchanged sentences

As a result of the Company’s insurance coverage, management believes that the estimated fair value of these indemnification agreements is minimal .

Thus, no liabilities have been recorded for these agreements as of November 30, 2020 .

Thus, no liabilities have been recorded for these agreements as of February 28, 2021 .

From time to time, the Company enters into indemnification agreements with certain contractual parties in the ordinary course of business, including agreements with lenders, lessors, contract manufacturers, marketing distributors, customers and certain vendors.

All such indemnification agreements are entered into in the context of the particular agreements and are provided in an attempt to properly allocate risk of loss in connection with the consummation of the underlying contractual arrangements.

the Company with respect to most potential claims arising from such agreements and that such agreements do not otherwise have value separate and apart from the liabilities incurred in the ordinary course of the Company’s business.

Thus, no liabilities have been recorded with respect to such indemnification agreements as of November 30, 2020 .

Although the maximum amount of future payments that the Company could be required to make under these indemnification agreements is unlimited, management believes that the Company maintains adequate levels of insurance coverage to protect the Company with respect to most potential claims arising from such agreements and that such agreements do not otherwise have value separate and apart from the liabilities incurred in the ordinary course of the Company’s business.

Thus, no liabilities have been recorded with respect to such indemnification agreements as of February 28, 2021 .

The Company uses an estimated annual effective tax rate, which is based on expected annual income, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes.

Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

The provision for income taxes was 15.7 % and 14.7 % of income before income taxes for the three months ended November 30, 2020 and 2019, respectively.

Discrete benefits, primarily those related to excess tax benefits from settlements of stock-based equity awards, reduced the effective income tax rate to a level significantly below the anticipated annual effective tax rate for each period.

Although these discrete benefits increased from period to period, they decreased as a percentage of pre-tax income due to significantly higher pre-tax income during the first quarter of fiscal year 2021 which resulted in a higher effective income tax rate from period to period.

The provision for income taxes was 15.0 % and 17.6 % of income before income taxes for the three months ended February 28, 2021 and February 29, 2020, respectively.

The decrease in the effective income tax rate from period to period was primarily due to an increase in excess tax benefits from settlements of stock-based equity awards, as well as the release of liabilities related to uncertain tax positions due to the expiration of statutes during the second quarter of fiscal year 2021.

The provision for income taxes was 15.4 % and 16.3 % of income before income taxes for the six months ended February 28, 2021 and February 29, 2020, respectively.

The decrease in the effective income tax rate from period to period was primarily due to a benefit from the High Tax Exemption associated with Global Intangible Low Taxed Income during the first half of fiscal year 2021, as well as an increase in excess tax benefits from settlements of stock-based equity awards.

The impact of these items on income tax expense percentages was partially offset by the effect of significantly higher pre-tax income for the six months ended February 28, 2021 when compared to the corresponding period in the prior fiscal year.

The Company is subject to taxation in the U.S.

and in various state and foreign jurisdictions.

The Company is currently under examination by various state taxing authorities.

Due to expired statutes, the Company’s federal income tax returns for years prior to fiscal year 2018 are not subject to examination by the U.S.

1 unchanged sentence

Generally, for the majority of state and foreign jurisdictions where the Company does business, periods prior to fiscal year 2017 are no longer subject to examination .

The Company is currently under audit in various state and foreign jurisdictions for fiscal years 2017 through 2019.

The Company is currently under audit in various state jurisdictions for fiscal years 2017 through 2019.

Estimated unrecognized tax benefits related to income tax positions may be affected by the resolution of tax examinations or expiring statutes of limitation within the next twelve months were not significant.

11 unchanged sentences

Corporate (1)

November 30, 2020:

February 28, 2021:

Income from operations

3 unchanged sentences

Interest expense

November 30, 2019:

February 29, 2020:

Income from operations

3 unchanged sentences

Interest expense

Six Months Ended:

February 28, 2021:

Income from operations

Depreciation and

amortization expense

Interest income

Interest expense

February 29, 2020:

Income from operations

Depreciation and

amortization expense

Interest income

Interest expense

(1) Unallocated corporate expenses are general corporate overhead expenses not directly attributable to any one of the business segments.

2 unchanged sentences

Net sales by product group are as follows (in thousands):

Three Months Ended November 30,

Three Months Ended February 28/29,

Six Months Ended February 28/29,

Maintenance products

1 unchanged sentence

Subsequent Events

On December 7, 2020 , the Company’s Board of Directors declared a cash dividend of $ 0.67 per share payable on January 29, 2021 to shareholders of record on January 15, 2021 .

On March 16, 2021, the Company’s Board of Directors approved a 7 % increase in the regular quarterly cash dividend, increasing it from $ 0.67 per share to $ 0.72 per share.

The $ 0.72 per share dividend declared on March 16, 2021 is payable on April 30, 2021 to shareholders of record on April 16 , 2021 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements